Brazil to produce 26 billion liters ethanol by 2010: Minister

Brazil to produce 26 billion liters ethanol by 2010: Minister

Houston (Platts)--11Sep2006

Brazil's sugarcane fuel-ethanol production will rise to 26 billion liters
in 2010, up from around 16 billion liters this year, as the country builds
several dozen new ethanol plants, expands its sugarcane plantation area by 33
percent and improves productivity from its existing 3 million hectares of
sugarcane plantations, Energy Minister Silar Rondeau said Monday.

Rondeau, speaking at the Rio Oil & Gas conference, said the sharp rise in
ethanol output, which relies upon billions of dollars in private-sector
investment to materialize, will give Brazil ethanol export capacity of 8
billion liters by 2010. Last year Brazil exported around 2.5 billion liters.
"The biofuels industry is taking off in a big way and it is clear to see,"
Rondeau said.

Rondeau also cited the booming biodiesel business in Brazil as an
industry that wil help Brazil improve its petroleum products trade balance, as
biodiesel begins to replace some diesel fuel in Brazil, which is partially
imported.

Rondeau said that Brazil should have as much as 2.58 billion liters
biodiesel production capacity by 2010, easily meeting a mandate to mix in 2
percent biodiesel into the country's diesel supply from 2008-2013. Starting in
2008, that mandate will require supplies of about 850 million liters biodiesel
per year, and Brazil should reach that installed capacity by the end of
2006. In 2013, fuel-blenders will be obliged to mix in 5 percent biodiesel
into the country's diesel supply.

The robust current production figures for biodiesel, as well as the
projected production expansion, is allowing the Brazilian government to
consider anticipating the 5 percent biodiesel mandate for an earlier date,
Rondeau said.

Government officials said earlier that the 5 percent biodiesel mandate
could be anticipated by 2-3 years if biodiesel production continues to
accelerate at current rates.

--Joshua Schneyer, newsdesk@platts.com

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